SIC 1794
EXCAVATION WORK

This category covers special trade contractors primarily engaged in
excavation work and digging foundations, including digging and loading.
Contractors in this industry may also perform incidental concrete work.
Contractors primarily engaged in concrete work are classified in
SIC 1771: Concrete Work.
Those primarily engaged in trenching or in earth moving and land clearing
not related to building construction are classified in the major group for
heavy construction other than building construction, contractors.

NAICS Code(s)

235930 (Excavation Contractors)

The U.S. excavation work industry includes more than 18,000 establishments
employing more than 116,000 workers according to the latest figures
published by the U.S. Department of Commerce. Larger establishments
(defined as those with 20 or more employees), account for less than 10
percent of the total number of establishments while taking in roughly 25
percent of all business done by this industry.

The two dominant costs of doing business in the excavation work industry
are materials components and supplies, as well as payroll. Other costs
include electricity; rental cost for machinery, equipment, and buildings;
and cost of repairs to machinery and equipment.

The status of the U.S. excavation industry generally mirrors the
country's economic climate, in particular the demand for
construction of detached single-family homes. Typically single-family
homes accounted for more than one-third of the value of all excavation
work in the United States, while other commercial buildings represent less
than one-fifth and educational buildings less than one-tenth.

The U.S. excavation work industry benefited from the sustained demand for
single-and multi-family housing in the early 2000s. The recession of the
early 1990s dropped housing starts to just 1.01 million in 1991, but the
economic recovery that began in 1992 helped housing starts rise each year
to a peak of 1.46 million in 1994. While starts dropped back to 1.35
million in 1995, they rose again to 1.45 million in 1996. In 1998 housing
starts matched the 1996 number of 1.45 million, down slightly from the
previous year. By 2002, however, housing starts had reached 1.70 million,
1.36 million of which were single-family, and 346,900 of which were
multifamily. The National Association of Home Builders expects continued
growth through at least 2005.

Because residential construction trends were up throughout the United
States in the early 2000s, excavation work in these areas was booming
despite a sluggish economy. Not surprisingly, most growth occurred in
southern and southwestern states, which have experienced the strongest
population growth in the United States during the 1990s and early 2000s.
Among the top 50 markets, many of which experienced annual growth of 20
percent or better, were Dallas, Texas; Houston, Texas; Phoenix, Arizona;
Atlanta, Georgia; and Las Vegas, Nevada. Florida leads the way in growth,
attracting aging baby boomers who are looking for retirement homes or
communities in warmer climates.

Small, independent operators remain the backbone of the excavation work
industry. They generally work as subcontractors to home building
companies, commercial construction firms, and others. Still, several large
companies hold dominant market positions in this industry, though they
tend to be regional and not national in scope. In 2003 the top companies
in the excavation work industry included Freesen Inc., Springfield,
Illinois ($130 million);